Acquisition Finance

What Is Acquisition Finance?

• Acquisition financing is the funding a company uses specifically for the purpose of acquiring another company.
• By acquiring another company, a smaller company can increase the size of its operations and benefit from the economies of scale achieved through the purchase.
• Bank loans, lines of credit, and loans from private lenders are all common choices for acquisition financing.
• Other types of acquisition financing including Small Business Association (SBA) loans, debt security, and owner financing.

Types of Purchasers

Strategic investors: Corporate purchasers acquire competitors ("market shares"), complementary businesses or non-related businesses (diversification).